2015 ORS
757.539¹

Eligibility criteria

• contents of application

• project proposal processes

• recovery of costs

• rate cap

• report to Legislative Assembly

(1) As used in this section, "emission" means any anthropogenic gas, such as carbon dioxide, methane, nitrous oxide, hydrofluorocarbons, perfluorocarbons and sulfur hexafluoride.

(2) The Public Utility Commission shall establish a voluntary emission reduction program for the purposes of incentivizing public utilities that furnish natural gas to invest in projects that reduce emissions and providing benefits to customers of public utilities that furnish natural gas.

(3) As part of the emission reduction program, the commission shall establish eligibility criteria for projects. The eligibility criteria must include:

(a) That the public utility requesting the project be a public utility that furnishes natural gas and that the project involve the provision of natural gas;

(b) That the project directly or indirectly reduce emissions;

(c) That the project benefit customers of the public utility as identified by the commission by rule or order;

(d) That the public utility, without the emission reduction program, would not invest in the project in the ordinary course of business;

(e) That the public utility, prior to filing an application under subsection (4) of this section, involve stakeholders as required by the commission by rule or order; and

(f) That the rate impact of the aggregate of all projects undertaken by a public utility under this section not exceed an amount established by the commission by rule or order.

(4) For each project that a public utility proposes under this section, the public utility must file with the commission an application. An application filed under this subsection must include:

(a) A description of the project;

(b) The projected amount of capital and operating costs necessary to complete and operate the project;

(c) The projected amount of reduced emissions created by the project;

(d) The potential of the project to reduce emissions not identified in paragraph (c) of this subsection;

(e) The projected date on which the project will become operational;

(f) A requested method, as described in subsection (8) of this section, for recovery of costs incurred and investments made and for the receipt of additional incentives;

(g) An explanation of why the public utility, without the emission reduction program, would not invest in the project in the ordinary course of business;

(h) Proof of stakeholder involvement;

(i) The projected rate impact of the project;

(j) The projected aggregate rate impact of all projects proposed by the public utility under this section and approved by the commission for the public utility under this section;

(k) An explanation of how the public utility will provide the commission with progress updates during the life of the project, including updates on costs and reduced emissions associated with the project; and

(L) Any other information required by the commission by rule or order.

(5)(a) The commission shall establish a two-tiered process for submitting a project proposal under the emission reduction program. For the purpose of establishing the tiers, the commission shall:

(b) If a proposed project meets both the threshold described in paragraph (a)(A) of this subsection and the threshold described in paragraph (a)(B) of this subsection, the project is a tier one project subject to the requirements of subsection (6) of this section. If a proposed project does not meet the threshold described in paragraph (a)(A) of this subsection or the threshold described in paragraph (a)(B) of this subsection, the project is a tier two project subject to the requirements of subsection (7) of this section.

(6) For tier one projects, the commission shall:

(a) Provide interested parties with an opportunity to submit written comment in response to the proposed project;

(b) Hold a public hearing to address all submitted written comments; and

(c) Issue a final order on the proposed project within 90 days of receiving the application for the project, or at a later time as authorized by the public utility.

(7) For tier two projects, the commission shall:

(a) By rule or order, provide interested parties with an opportunity to submit testimony in response to the proposed project and be heard; and

(b) Issue a final order on the proposed project within 180 days of receiving the application for the project, or at a later time as authorized by the public utility.

(8) If a final order issued under subsection (6)(c) or (7)(b) of this section authorizes a project, the order shall specify:

(a) The type of ratepayer from whom the public utility that submitted the project proposal may recover costs incurred and investments made and receive any allowed additional incentives. A public utility may recover costs incurred and investments made and receive any allowed additional incentives from a type of ratepayer under this paragraph only if the commission makes a finding that the type of ratepayer receives a benefit from the project. If the commission makes a finding that more than one type of ratepayer receives a benefit from the project, the commission shall allow recovery of costs incurred and investments made and receipt of any allowed additional incentives from each type of ratepayer in an amount that is proportionate to the proportion of the benefit received, as determined by the commission, by the type of ratepayer.

(b) The method by which the public utility that submitted the project proposal may recover costs incurred and investments made and receive any allowed additional incentives, and the amount that the public utility may recover and receive. Methods of recovery and receipt include:

(A) Payment per unit of reduced emissions;

(B) Preapproval for inclusion in the public utility’s rates of costs prudently incurred and of investments prudently made;

(C) Return of investment and return on investment; and

(D) Any other method approved by the commission by rule or order.

(9) For purposes related to the emission reduction program established under this section, the commission may consider the amount of reduced emissions created by a project or the value of reduced emissions created by a project.

(10) The commission shall establish a rate cap for each public utility for which a project is authorized under this section. The rate cap must limit the cost of all of the public utility’s projects authorized under this section to an amount that does not exceed a percentage of the public utility’s revenue requirement as identified by the commission by rule or order.

(11) The commission shall biennially conduct a study on whether federal law or regulation or other state laws or rules provide adequate incentives for public utilities that furnish natural gas to invest in projects that reduce emissions in the ordinary course of business. The commission shall report the results of a study conducted under this subsection, and may make recommendations for legislation, to the Legislative Assembly in the manner described in ORS 192.245 (Form of report to legislature) not later than February 1 of each odd-numbered year. [2013 c.607 §2; 2015 c.24 §1]

Sec. 2. Requirement to procure energy storage systems on or before January 1, 2020. (1) If authorized under section 3 (3) of this 2015 Act, an electric company shall procure, on or before January 1, 2020, as part of a project described in section 3 of this 2015 Act, one or more qualifying energy storage systems that have the capacity to store at least five megawatt hours of energy.

(2)(a) The total capacity of qualifying energy storage systems procured under this section by any one electric company may not exceed one percent of the electric company’s peak load for the year 2014.

(b) The Public Utility Commission may waive the limit described in paragraph (a) of this subsection if the commission determines, in consultation with the State Department of Energy, that a qualifying energy storage system is of statewide significance and one or more electric utilities, as defined in ORS 757.600 (Definitions for ORS 757.600 to 757.689), participates in procuring the qualifying energy storage system and shares the costs and benefits associated with procuring the qualifying energy storage system.

(3) An electric company may recover in the electric company’s rates all costs prudently incurred by the electric company in procuring one or more qualifying energy storage systems under this section, including any above-market costs associated with procurement. [2015 c.312 §2]

Sec. 3. Proposals for developing energy storage systems; rules. (1) Not later than January 1, 2017, the Public Utility Commission shall by rule or order adopt guidelines for an electric company to use in submitting a proposal under subsection (2) of this section. In developing the guidelines, the commission shall:

(G) Any other value reasonably related to the application of energy storage system technology.

(b) Consider ways in which to encourage electric companies to invest in different types of energy storage systems.

(c) Consider any other factor reasonably related to the procurement of qualifying energy storage systems.

(2)(a) Not later than January 1, 2018, an electric company shall submit one or more proposals to the commission for developing a project that includes one or more energy storage systems.

(b) Each proposal submitted under this subsection must include an evaluation of the potential to store energy in the electric company’s electric system, including an analysis of:

(A) The electric company’s current operations and the electric company’s electric system data, including customer-side data, distribution data, transmission data and data related to existing energy storage systems, including any energy storage system developed as part of a pilot or demonstration project. The analysis shall be used to identify areas in the electric company’s electric system where there may be opportunities to incentivize the value potentially derived from energy storage systems.

(B) How the addition of an energy storage system would complement proposed actions submitted pursuant to any plan submitted to the commission in which the electric company has proposed an integrated, least-cost combination of resources to meet the expected needs of the electric company’s customers.

(c) Each proposal submitted under this subsection also must include a description of each proposed project. The description must include:

(A) Technical specifications for each project, including:

(i) The capacity of the project to store energy;

(ii) The location of the project;

(iii) A description of the electric company’s electric system needs and the application that the energy storage system will fulfill as the basis for the project;

(iv) A description of the technology necessary to construct, operate and maintain the project, including a description of any data or communication system necessary to operate the project;

(v) A description of the types of services that the electric company expects the project to provide upon completion;

(vi) An analysis of the risk that the electric company will not be able to complete the project; and

(vii) Any other reasonable technical specification required by the commission pursuant to the guidelines adopted under subsection (1) of this section.

(B) The estimated cost of each project, including:

(i) The estimated capital cost of the project;

(ii) The estimated output cost of the project; and

(iii) The amount of grant moneys available to offset the cost of the project.

(C) The benefits of each project to the electric company’s electric system, including:

(i) Projected in-state benefits to the electric system;

(ii) Projected regional benefits to the electric system; and

(iii) The potential benefits to the electric company’s entire electric system if the electric company installs the energy storage system technology that is the basis for the project system-wide.

(D) An evaluation of the cost-effectiveness of each project, conducted in a manner established by the commission by rule or order.

(d) The information and analyses required to be submitted to the commission under this subsection may contain critical energy infrastructure information, trade secrets and other confidential research, development or commercial information the public disclosure of which could threaten the security and safety of an electric company’s electric system or allow unfair competition or business advantages. The commission may not use or allow the use of the information and analyses for any purpose other than the purposes described in this section and, in order to protect the information:

(A) Shall determine the procedures under which a person may view the information and analyses; and

(B) Shall adopt a protective order that includes reasonable restrictions requested by an electric company in good faith on removing material from commission offices, not allowing copying or photographing of the material, not allowing electronic transmission of the material or only allowing limited viewing of the material in restricted areas.

(3)(a) The commission shall consider each proposal submitted under subsection (2) of this section and evaluate each proposal to determine whether the proposal:

(A) Is consistent with the guidelines adopted under subsection (1) of this section;

(B) Reasonably balances the value for ratepayers and utility operations that is potentially derived from the application of energy storage system technology and the costs of construction, operation and maintenance of energy storage systems; and

(C) Is in the public interest.

(b) After considering the factors described in paragraph (a) of this subsection, the commission may authorize an electric company to develop one or more projects that include one or more qualifying energy storage systems.

(4) If authorized to develop a project under subsection (3) of this section, the commission may require an electric company to develop the project in accordance with any competitive bidding guidelines prescribed by the commission. [2015 c.312 §3]

Sec. 4. Reports. In the manner required by ORS 192.245 (Form of report to legislature), the Public Utility Commission shall report on the implementation of sections 1, 2 and 3 of this 2015 Act to the interim committees of the Legislative Assembly related to energy:

Refund is proper exercise of Public Utility Commission's general powers if refund (1) is based only on in­for­ma­­tion in existence at time of rate order for which refund is being made; (2) is not based on evalua­tion of public utility's actual expenses or revenues; and (3) is not effectuated by offsetting future rates. Gearhart v. Public Utility Commission, 255 Or App 58, 299 P3d 533 (2013), aff'd 356 Or 216, 339 P3d 904 (2014)

Atty. Gen. Opinions

Authority of Governor and Public Utility Commissioner to enter into binding agree­ments with respect to uniform curtail­ment plans, (1977) Vol 38, p 861

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